Have you noticed a theme in municipal bond news lately?

Market pros are inveighing against the “cost of waiting.”

Yields may be easing and the Treasury-to-muni ratio looks tighter, they say, but it’s not time to flee. Instead, they urge investors to “stay and enjoy the yield.”

In a market that’s often described as exciting as watching paint dry, what’s all the fuss?

A closer look tells the story.

Muni yields ease, but remain elevated

As we’ve been saying for months, an unusual confluence of events has pushed municipal bond yields near 15-year highs (“How the Muni Curve Turned,” “Record Muni Supply Leads to Juicy Yields”).

First came a surge in issuance as state and local governments responded to infrastructure needs, rising costs and concern over whether the tax exemption on income from municipal bonds would be wiped out. Earlier in the year, a tax-season selloff and tariff-related volatility added to the mix.

Then, as tariff concerns faded, yields began to ease.

“After months of being labeled ‘cheap,’ the tax-exempt market responded with a rally across the full curve,” Vanguard noted earlier this month. “Yields dropped, ratios tightened, and early investors saw results. But if you missed the first wave, don’t worry. There’s still opportunity ahead, especially for those focused on what’s next.”

What’s next?

It seems a lot of investors are wondering what’s next. Last week ICI reported a record-breaking $7.39 trillion sitting on the sidelines in money-market funds.

In today’s market, waiting for a “better moment” can cost investors in ways they may not notice until it’s too late. As yields ease and inventory tighten, the market can shift, often almost imperceptibly.

“Within fixed-income markets, hesitation isn’t harmless – it’s a tactical misstep that can quietly erode your purchase yield,” Raymond James said in a recent report.

“Whether you are making an initial investment in municipal bonds or managing an existing fixed-income portfolio, a decision to wait can have significant consequences,” the firm said, cautioning investors not to be so “hyper-focused on hitting a particular yield” that they “can’t see the forest from the trees.”

Quality, then yield

As we’ve reminded our clients and friends since our founding, when funds are available, look for quality first, then yield.

Right now, we’re at a favorable moment – a mix of quality, choice and yield.

As always, investors should understand what they buy. But delaying a decision isn’t the same as being cautious. Sometimes it just means letting opportunity slip away. In this environment, those who act with clarity are best positioned to capture attractive yields while they’re still available.

Indeed, the cost of waiting could be higher than it looks.